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EU: Summit Again Shows Britain's Isolation

Last week's European Union summit in Helsinki once again revealed Britain's isolation within the 15 nation grouping. This time, it stood apart in opposing a tax initiative. British leaders also continued wrangling with France over the export of British beef.

London, 14 December 1999 (RFE/RL) -- Britain once again finds itself isolated within the EU following its rejection at the Helsinki summit at the weekend of a savings and investment tax that has been accepted by all its 14 partner nations.

Prime Minister Tony Blair, who has repeatedly promised that Britain will play a more constructive role in Europe, found himself cast in the spoiling role once occupied by former prime minister Margaret Thatcher -- long one of the EU's most vociferous critics.

The summit was highlighted by the historic decision to start entry talks with six more countries: Latvia, Lithuania, Slovakia, Bulgaria, Romania and Malta. The summit also recognized Turkey as a candidate for membership -- something long sought by Ankara.

While these decisions dominated the post-summit news reports, Blair's threat to use Britain's national veto to prevent an EU-wide tax on savings cast a defiant shadow over the gathering.

Germany, France and Italy support the introduction of a new EU directive which aims to tackle the problem of tax evasion. It would do so by imposing an across-the-board 20 percent deduction on interest payments from private savings.

But Blair says the proposed tax directive will damage the City of London, Europe's leading financial center, by driving savers and investors to place their money elsewhere. He made that case to Britain's House of Commons yesterday:

"There is increasing recognition that it is not good adopting measures in the European Union if the only impact is that the market in savings moves outside the European Union."

The row was papered over with an agreement on setting up a high-level working group to discuss a proposed exchange of information that involved more than just the EU countries.

Blair's stubbornness revived claims from other EU politicians that Britain is, once again, putting its own national interest ahead of the common good, and thus isolating itself.

Britain has long been a leading critic within the EU of what many see as excessive bureaucracy. Frequent targets are what some see as the EU's lack of transparency and democratic accountability; fraud, waste, and clumsy decision-making.

Blair won power two years ago determined to adopt a more euro-friendly tone compared with his conservative predecessors, Thatcher and John Major. But -- while the rhetoric has softened -- his Labour administration has many doubts.

Critics fault Blair for taking a wait-and-see attitude to the new European currency, the euro, before deciding whether to join; and for generally holding up progress toward the goal of a "federal Europe."

The critics also accuse Blair's government of not living up to its rhetoric about being a "good European"; of behaving insensitively towards its partners; and putting ties with Washington ahead of ties with Brussels.

The fact that the Helsinki summit also saw new tensions between Britain and France over the French refusal to accept British beef imports -- despite an EU directive -- also soured the atmosphere.

France and Germany still ban British beef amid consumer fears that it is unsafe. Britain was the country worst affected by BSE -- or 'mad cow disease' -- the cause of a rare but fatal disease among humans who eat infected meat. Britain cites scientific evidence that --- after slaughtering millions of cows -- its beef is now safe.

British opposition Conservative leader William Hague, whose party is strongly anti-EU in many policy areas, claimed in yesterday's parliamentary debate that the Helsinki summit showed that Blair policy's toward the EU has failed:

"Overall didn't this summit represent the complete failure of the Prime Minister's strategy on Europe (uproar)? And isn't it the case that he came to office saying I will never allow this country to be isolated in Europe, and isn't it true that he thought all he had to do was concede and cave in in order to gain the goodwill of our European partners, and isn't it now apparent that, two and a half years later, he has got nothing in return for his caving in?"

Blair insists his policy towards the EU remains positive. He played up the Helsinki summit's "historic" achievement in pressing ahead with enlargement, and its decision to form a new European military force aimed at crisis management and humanitarian tasks.

Still, the refusal to accept the tax directive has further marginalized his government within the EU. One critic says it is a classic demonstration of how one country is able to "hold up the entire EU convoy".